U.S. Propane Market Size, Share & COVID-19 Impact Analysis, By Grade (HD-5, HD-10, and Commercial), and By End-user (Residential, Commercial, Industrial, and Others), and Country Forecast, 2023-2030

The U.S. propane market size was worth USD 26.62 billion in 2022 and is projected to grow at a CAGR of 11.39% during the forecast period. 

The U.S. has observed a substantial rise in the demand for propane from the residential sector in homes for water heaters, outdoor grills, furnaces, air conditioners, fireplaces, and on farms, propane-powered technologies, dry crops, power generation, and power irrigation pumps. Propane production is efficient and economical, and any commercial or residential building that runs on electricity can work on propane. The cost analysis of electricity is twice the cost of propane. It is one of many important by-products of the oil and natural gas value chains, providing fuel for residential and commercial end users and serving agricultural communities across the U.S.

The COVID-19 impact halted the growth of almost all industries, which included the market as well. Challenges faced by all infrastructure sectors, such as office reentry, business travel, technology, and others. Moreover, access to masks and disinfectants for common carrier trucking operations that are independent contractors from propane operations was maintained.

LATEST TRENDS

Increased Awareness Related to Propane Benefits in Construction Industry to Aid Market Growth

Propane has many benefits for residential purposes such as water heating and home appliances and for commercial applications as well as agriculture and transportation. However, there's one sector that benefits the most from using propane energy in the construction industry. Various construction projects continue the work in the winter, and space heating is essential. Moreover, its usage is applicable for generators, trucks, cars, elevating lifts, and more.

DRIVING FACTORS

Growing Utilization of Propane in Various Applications to Drive Market Growth

Burning propane harvests less greenhouse gas emissions (GHG) when compared to other types of fuel. It is a suitable and portable gas cylinder that can be installed, transported, and refilled anywhere. It is environmentally friendly with minute sulphur content and zero lead content. It can be utilized for heating homes, fueling backyard grills, healing balms, and operating farm equipment, fueling fleet vehicles, and fueling hot air balloons and appliances.

RESTRAINING FACTORS

High Installation Cost and Maintenance Hamper Market Growth

The high installation and maintenance cost is anticipated to impede market growth. Installation is done by professionals, which automatically upsurges the cost of installation. Propane gas is combustible and, if escaped in a narrow space, can shape up and detonate if exposed to a flame or spark. This means propane lines must be precisely inspected to safeguard so that it is not leaking. Broken tanks are also at an explosion risk, as internal pressure can cause them to explode.

SEGMENTATION

By Grade Analysis

Based on grade, the market is segmented into HD-5, HD-10, and commercial. The HD-5 segment held the largest U.S. propane market share in 2022 owing to the fact that it is the most widely used and distributed grade of propane.

• As per Grade, HD-5 is the utmost grade propane available to consumers in the U.S., and this is what companies are offering to their consumers. It is used locally in residential and commercial use. It is very suitable and recommended for engine fuel use, which was the original motive of the HD-5 propane.

By End-user Analysis

Based on end-user, the market is segmented into residential, commercial, industrial, and others. The residential segment held the largest market share in 2022 owing to the increasing recognition of propane as a green energy source due to its environment-friendly properties, efficiency, and versatility.

• The propane industry depends largely on a healthy residential marketplace, as the residential sector accounts for twice the sales of 2021. According to EIA, U.S. households utilize propane for at least one residential application, excluding outdoor grilling. Many homeowners who do not have access to natural gas processing services find alternatives and hire a propane service to deliver tanks year-round.

KEY INDUSTRY PLAYERS

The U.S. market is fragmented in nature, owing to the presence of a vast number of propane gas producers around the world. These companies are leading the market in terms of production, owing to their vast production outputs at several facilities around the globe.

Some of the companies with a considerable presence in the U.S. market include British Petroleum, AmeriGas, and Valero Energy Corporation. These companies are also influenced by factors such as supply chain disruption, changes in policies and regulations, as well as price and availability of natural gas and crude oil. The U.S. propane market growth is expected to continue due to the ascending popularity of appliances powered by propane and its awareness as an alternative fuel.

LIST OF KEY COMPANIES PROFILED:

• British Petroleum (U.K.)


• AmeriGas (U.S.)


• Valero Energy Corporation (U.S.)


• Evonik Industries (Germany)


• Sika AG (Switzerland)


• PetroChina Company Limited (China)


• Chevron Corporation (U.S.)


• Shell Oil Company (U.K.)


• Sinopec (China)


• Exxon Mobil (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• February 2022: AmeriGas Propane, a propane marketer, entered into a partnership with Global Clean Energy Holdings, a vertically integrated renewable fuels company with the purpose of purchasing and distributing renewable liquefied petroleum gas (LPG). Under the agreement, AmeriGas will use its supply and logistics as well as its sales and marketing teams to dispense and market LPG to new and existing customers.


• August 2022: AmeriGas Propane acquired South Florida Lift Gas, which primarily serves forklift cylinder exchange consumers.


• September 2021: Kauffman Gas announced the acquisition of Penn-Jersey Propane, a New Jersey-based propane delivery company. This acquisition will spread the excellent service of Kauffman Gas to thousands of people in New Jersey, as well as new modern techniques to make their propane experience seamless.

REPORT COVERAGE

The market report provides a detailed analysis of the market. It focuses on key aspects such as an overview of the technological advancements, the prevalence of its usage in the U.S., and pricing analysis. Additionally, it includes an overview of the day-to-day use in the residential sector in U.S., the increasing demand for the commercial sector in U.S., new product launches, key industry developments such as mergers, partnerships, acquisitions, and the impact of COVID-19 on the market. Besides this, the report also offers insights into the market trends and highlights key industry dynamics. In addition to the aforementioned factors, it encompasses several factors that have contributed to market growth over recent years.

Report Scope & Segmentation